C&C Group, the maker of Magners cider has reported a profit slump, cut its dividend and said chief executive officer Maurice Pratt will resign after a two-year strategy to reinvigorate sales failed to achieve its targets.
Net income slid to €57.6 million (£45.7 million sterling) in the six months until the end of August from €198.3 million a year earlier, the company said in a statement. However, disposals added almost €146 million to profit in last year's first half.
Gains from selling units boosted earnings in 2007. C&C plans to cut the interim dividend by 50 per cent to 6 cents a share.
"In the current uncertain economic environment and in light of the group's performance trends and the expected impact of sterling depreciation in 2009/10, the board proposes to rebase the dividend," C&C said.
Mr Pratt, who joined C&C in 2002 to lead the company's 2004 initial public offering, introduced new cider varieties in an effort to boost sales after wet weather and competition from rival brands led to a slump in UK demand.
The CEO's strategy to turn around the company "has not met the expectations he had set for the business," C&C said in the statement. Mr Pratt will continue to manage the business until a successor is found.
"The past two years have been very challenging for C&C and despite our best efforts we have not achieved our ambitions for the business," Mr Pratt said in the statement.
"As Chief Executive, I have to be accountable and take responsibility for business performance." The board of C&C "fully respects" Mr Pratt's decision, chairman Tony O'Brien said.
The company introduced draft and lower-calorie versions of Magners after last year's sale of its soft-drink unit left it more reliant on cider. C&C faces a slump in consumer spending as companies cut jobs, confidence weakens and economies stagnate or shrink in Britain and its domestic market.
Mr Pratt joined C&C as CEO in 2002 from Tesco Ireland. C&C fell 15 cents, or 10 per cent, to €1.35 in Dublin trading yesterday.
The stock, which peaked last year at €14.03, has slid 29 per cent this month, more than any company in the Bloomberg Europe Beverages Index except brewer Carlsberg A/S.
Demand for cider, which C&C sells under the Bulmers brand in Ireland and the Magners name elsewhere, typically weakens during cool weather.
Bloomberg